May be buying my 1st house soon, any suggestions/warnings?

[thecavemankevin]

Well, my wife and i are talking seriously about buying our 1st house soon and i was wondering what advice you guys may have.

Now we of course will be going with a SMALL single family dwelling because...well we cant afford much.

I am not to conserned with type of house suggestions, but what i am looking for from you guys is any advice in terms of mortgages, lenders (is it better to go with a regular bank or mortgage company) any precautions and so forth.

We will be looking at a 30 year (probably fixed) mortgage. And i do know that interest only loans are the devil

[Lohman446]

Well, my wife and i are talking seriously about buying our 1st house soon and i was wondering what advice you guys may have.

Now we of course will be going with a SMALL single family dwelling because...well we cant afford much.

I am not to conserned with type of house suggestions, but what i am looking for from you guys is any advice in terms of mortgages, lenders (is it better to go with a regular bank or mortgage company) any precautions and so forth.

We will be looking at a 30 year (probably fixed) mortgage. And i do know that interest only loans are the devil

The federal loan programs are designed to be an assett to first time home-buyers with little experience. My advice though is to hire a real estate agent to act as your buyer (real estate agents normally work for the seller). By paying them a little bit they will help guide you through the process in a way that looks after your interests rather than the sellers. Unless you have someone familar with inspectors, loan agents, etc. in the field. Its like renting an insider.

[RRfireblade]

Real Estate Brokers can work for either party in a transaction, just not both sides at the same time.

But, yes...that's what I would suggest. Depending on the state your in and thier laws, my only suggestion is that you ask for an Agency disclosure form when you do so that will make you fully aware of which side the Broker/Licensee is working for. Hopefully that's you. If it's an option,you may also want to look for a "Realtor Broker" which IMO is a broker of assumed higher standard and answers to the NAR as well as all other laws.


(FYI, I'm a Real Estate Licensee here in Florida, let me know if I can be any help)

[luke]

In regard to your loan:

Don't buy "Points" it's a scam for a lack of a better word, all it is pre paid interest.

If possible pay taxes and insurance sperate from your loan. If you lump it all into the payment you will pay interest on it.

Do your research, know what the seller paid for the house and when they purchased it, it's public record.

Don't be afraid to low ball the seller.

[Lohman446]

Real Estate Brokers can work for either party in a transaction, just not both sides at the same time.

I didn't mean to imply that they didn't. As a general rule the real estate agent selling you the house is working for the homeowner and is attempting to get them the best price possible. You can often get a better deal (more than enough to pay whatever an agent charges you) if you have an agent work as your agent in the buying process. They will also have the expertise to guide you through the transaction and necessary inspections / etc. As well as steering you away from inspectors who are simply paid to pass a house rather than inspect it.

I agree... when an agent hads you a disclosure agreement about who they are working for, laughs and calls it a formality, read it. They are working for the seller (normally) and are obligated to get the best possible price.

[RRfireblade]

I know, no insult to you. I just needed to clear that up because it's one of the most mis understaoode parts of Real Estate for the consumer.

It's also the number one broken law in Real Estate today. It's not 'usually' that way and the Consumer rarely knows that.

The Law, in FL anyway, 'requires' that relationship to be established at first contact with the custumer.

It can be one of three way (in laymans terrms)

1) I work for you, the buyer.

2) I work for you, the seller.

Both 'Single Agent Relationships'

3) I have no relationship with either.

'Transaction Broker'

It's the first thing an informed buyer should know when working with a Real Estate agent and the law requires them to be informed in writting, but they rarely are.

[RRfireblade]

Oh,

It's only 'usually' that way if the Agent is showing his own listing. Anything on an outside listing, and he's 'usually' working for you (buyer) or neither party (transaction broker). His is obligated to follow the law and basic fair Real Estate practices for either party regardless of who he has the fuduciary with.

[Lohman446]

Oh,

It's only 'usually' that way if the Agent is showing his own listing. Anything on an outside listing, and he's 'usually' working for you (buyer) or neither party (transaction broker). His is obligated to follow the law and basic fair Real Estate practices for either party regardless of who he has the fuduciary with.

Trust the person who is actually professionally involved in it to know more than I do. Oops...

[SCpoloRicker]

5/1 fixed interest only on a 30 year base.

/am currently "worshipping the devil."
//hey its CA

[RRfireblade]

Trust the person who is actually professionally involved in it to know more than I do. Oops...

Well, I'm still pretty new but working my way into it. Can't live on paintball alone.

[Target Practice]

Before you buy it, measure the perimeter of the outside and the inside of the house very, very carefully. If the inside of the house is bigger than the outside, the the hell out of Dodge as fast as you can.

[MicroMiniMe]

Yeah, don't be afraid to lowball on an offer. The market is just realizing its overinflated in most of the country.
So get preapproved by your lender, that gets you ready if one you like drops in your lap.

If you can handle it, pay your morgage weekly/biweekly through your lender (if they offer it) or a reputable 3rd party program. By paying the same payment you do in a month cut to weekly payments, you can shave a good 7 years off the loan for a standard 30 year. If you are short on your rough 5% down or less, ask to have your share of the buyer fees rolled into the purchase price/your morgage. Most sellers will gladly oblige.

After the offer is accepted, get your own inspector to go through the property. They will find the little things that can turn into the potential disasters down the road, or just safety hazards that should be fixed by the seller before closing. Anything from live wire loose ends in the electrical, to mold (that could nullify your offer if you wanted) or a handrail on stairs if you want it. Yeah, its a few hundred out of your pocket for an inspector, but getting FUBARed being stuck with a money pit house a year after the sale is something to avoid, just like getting title insurance to avoid any unknown leins against the seller/house.

If you do plan on selling in under 10 years and going bigger, wouldn't an ARM loan be better?

[drg]

I strongly agree with the "get an agent" suggestion. I dont know if it's the same in every state but it doesn't cost the buyer any more in mine whether there are one, two or no agents (it is all included in the final cost of the home). Agents often have relationships with mortgage brokers and can steer you in the right direction. Leverage any personal contacts you have -- this is a big purchase and trust is very valuable,

Steer clear of the new "interest only" or worse fad loans. Don't be afraid to downsize your plans if the market is too hot right now or to improve your location. Be honest about what you can afford (you don't want money woes to strain the relationship right off the bat in a new home). Remember you'll have to spend quite a bit furnishing the place, most likely.

Check into association/maintenance fees and especially bylaws. Don't get blindsided by this stuff. More later if I think about it.

Try to avoid mortgage insurance. Be sure you understand your financing options and limitations.

[B.A.M.]

First off hope you get a good house.

well my dad is deep into buying houses and leasing them. He also was a general contractor for many years. When looking at a house you are most likely going to buy make sure you get it inspected. Also if you have a carpenter friend have him look at the house to see if it looks well made. I dont mean if it looks nice but if the walls are framed right, is the foundation good, ect. Lastly i would suggest make sure you like where you are planing to live. Nothings worse than getting a house and having crappy neighbors. Good luck and i hope i've helped.

[Steelrat]

-Get an agent.
-Pay for an inspection, even if your lender doesn't require it
-Shop around for rates
-If you plan on buying a different house in a few years, go with a 3/1 or 5/1. Otherwise, go with a 30 year fixed
-Don't pay points
-Don't take a mortgage with a prepayment penalty
-Investigate your school district
-Check with the local police about crime in your area
-If you can, check for sex offenders in the area
-Check on any neighborhood associations, and their covenenants
-Check on the taxes
-Don't buy the most, or least, expensive house in the neighborhood
-A clean house with few upgrades is better than a place with junk like pools, etc, that is in need of repairs.
-Don't buy a wacky place that seems "cool" if you plan on selling again soon. Tell your agent you want a place that would sell easily in the future.
-AVOID well water. Septic isn't bad, but wells are challenging to have.
-Did I mention about getting an inspection? Get a radon test too.
-Don't pay a loan origination fee unless its the custom in your area.